Merging company

Public Regulatory Commission unanimously rejects PNM’s merger project | Local news

The state’s Public Regulatory Commission unanimously rejected the New Mexico utility company’s merger proposal on Wednesday.

The commission rejected the plan proposed by PNM, Avangrid of Connecticut and Iberdrola of Spain, Avangrid’s parent company. The panel also fined Avangrid $ 10,000 for failing to fully show up in the spring, roughly $ 63 million in penalties its Northeastern affiliates have faced for service issues over the years. last years.

Commission Chairman Stephen Fischmann de Las Cruces and other members of the five-person panel expressed concern over how Avangrid and Iberdrola performed during months of debate and discussion. Fischmann said this is a time when the world is shifting to renewables like solar and wind power, and New Mexico needs to find the right partners.

“They demonstrated the behaviors we are afraid of. We’ve seen it here, ”Fischmann said of the proposed partners. “And that tells me that this is not the right partner at this critical time in our energy transition.”

For now, the vote has closed a deal that had dragged on since late last year, when PNM and Avangrid announced their proposed merger. The proposal amounted to an $ 8.3 billion deal and would have placed PNM under the umbrella of Avangrid and Iberdrola.

Merger candidates can return to the commission with another plan or appeal to the state’s Supreme Court.

The commissioners made it clear that they did not like the service record of Avangrid’s branches in Maine, Connecticut and New York. They also expressed concern over a criminal investigation in Spain involving former and current leaders of Iberdrola. And they said they believed the claimants ignored some PRC regulations.

For example, the commission rejected PNM and Avangrid’s recent request to present more oral arguments in the case even though the time limit for such a plea had expired.

The PNM said in a written statement that it would explore its options.

“I am saddened by the decision of this Commission to reject the agreement reached by the parties,” said PNM Resources CEO and President Pat Vincent-Collawn. “We will continue to assess next steps that may allow us to bring positive benefits to the people we serve. “

The elected commission will become a three-member panel appointed in 2023. Voters approved the change last year. The governor will appoint and the state Senate will confirm the members.

Avangrid also said in a statement that he will “reassess the way forward” and remain “dedicated to the work we do every day in 24 states to create economic, social and environmental value in all the communities we serve. As we hope to one day welcome New Mexico into the Avangrid family, our future remains bright. “

Twenty-three of 24 community and environmental groups either supported or did not oppose the merger proposal. Some expressed their disappointment with the commission’s decision.

“This ill-fated move by the NMPRC means our state will lose $ 300 million in benefits for taxpayers, communities and workers, as well as the important commitments and capacities Avangrid would bring to tackle climate change,” said Steve Michel of Western Resource Advocates in a statement. declaration.

But Mariel Nanasi of New Energy Economy, who opposed the merger, said in a statement that the commission prioritized “reliability, fair competition in the renewable energy sector, and ethical and professional behavior.”

She also said the commission should “be commended for caring more about the future of New Mexicans than the pressure exerted on it by the PNM and Avangrid in the form of publicity and political pressure.”

Three members of the commission expressed their intentions last week, saying they doubted they could support the proposal. The next day, Avangrid and PNM held a press conference on Zoom in which Attorney General Hector Balderas and others criticized the commission for making its decision before the process was completed.

The merger candidates then asked the commission if they could present oral arguments. In their formal request, they admitted having exceeded the deadline.

The committee voted 4-1 against allowing oral arguments, with only Commissioner Joseph Maestas of Santa Fe in favor.

Maestas said there “seems to be a perception that we have rushed to judge”. He said the commission had not done this, but if allowing oral argument could allay that concern, he was prepared to do so.

Commissioners said criticism of their refusal to allow oral argument was not justified as the evidence file in the case has been closed for weeks.

“I think granting that would have the effect… of capitulating to them in their practice of fundamentally not following our rules,” Albuquerque Commissioner Cynthia Hall said.

The committee then moved on to discuss the merger proposal itself. Among other things, the Commissioners wondered where the plaintiffs’ claim for $ 300 million in “quantifiable benefits” came from.

Ashley Schannauer, the hearing examiner who spoke out against the proposal last month, said he assumed the $ 300 million included a pledge to create 150 jobs, which would then lead to 255 new additional jobs.

Schannauer also told the commission that the candidates failed to convince him that the merger of the companies would improve electrical service in New Mexico.

Based on the poor service rankings of some Avangrid subsidiaries (Central Maine Power last year was at the bottom of a customer satisfaction study involving more than 120 companies), he said, ” it seemed logical “that service could drop in New Mexico as well.” .

“Did they show ways to improve the reliability of the (electrical) system?” Asked Commissioner Theresa Becenti-Aguilar. “Did they show high level plans for energy development? “

Schannauer said no. “It was actually one of my concerns,” he said. “They were talking about everything but reliability.”

Over the summer, Schannauer ruled that Iberdrola’s hiring of Balderas’ friend Marcus Rael as the promoter of the $ 400 an hour project was a conflict of interest and he ordered Raël and Iberdrola to withdraw. Raël and his law firm receive numerous contracts from the Attorney General’s office.

Fischmann said the many financial benefits promised by merger candidates would quickly be eroded by reliability issues and higher rates if they didn’t perform well. “And to me, the whole thing kind of boils down to promises versus actual performance.”

He said PNM should look for a partner who can deliver.


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